reese_john

vor 27 Tagendiscuss

It is a testament to the bloat and overreach of the Brazilian state in the economy. Such endeavors should be left to the private sector

reese_john

vor 2 Monatendiscuss

I suggest you go read the SFN messaging manuals from BCB if you truly want to understand how interbank communication works. It is very well documented.

You clearly don’t know what you are talking about since you are conflating the STR (transfer reserve system) with TED (one of the many settlement methods in STR)

reese_john

vor 2 Monatendiscuss

I don’t even understand what you mean by “banks had to talk to each other” and why you are referring to TED in the past tense when it’s still the largest settlement method by BRL amount

reese_john

vor 2 Monatendiscuss

Have you ever worked in a financial institution?

This is such a common occurrence that the BCB had to impose a default $200 nightly limit for Pix trns between 8pm and 6am.

The way it works is, criminals use money mules, or stolen identities, to open legitimate bank accounts, then once the cash hits the account, they fan out the stolen proceeds to crypto rails or other money mules (“laranjas”)

BCB has been trying to solve this with MED 2.0 but it is still a duct tape over the real problem: rampant crime and fraud in Brazil

And let’s not dive into the digital bank heists that have been happening since the last year, when hackers have already managed to steal hundreds of millions of dollars from the financial system by exploiting Pix’s 24/7 network [0]

Such attack to the financial system would have been akin to a war declaration in serious countries, but crime is so widespread and normalized that Brazilians lowered their standards to accept these absurd situations

  [0] Hackers steal R$400m in attack on Pix-connected fintech: https://valorinternational.globo.com/google/amp/markets/news/2025/07/02/hackers-steal-r400m-in-attack-on-pix-connected-fintech.ghtml

reese_john

vor 2 Monatendiscuss

> Second, good - they should have an _algorithm_ checking every transaction. MasterCard and VISA do it and do nothing for me;

You are confusing transaction authorization done by card networks/issuers with the kind of fraud analysis that happens post settlement and requires correlating multiple transactions and accounts

> the government could catch all the money laundering

No, you don’t have enough information in transactions alone to identify all money laundering, specially the sophisticated kind.

reese_john

vor 2 Monatendiscuss

… and yet they both suffer from availability issues despite not having nearly the same scale as e.g. Nubank who uses AWS

Caixa was down yesterday: https://www.techtudo.com.br/google/amp/noticias/2026/05/caix...

reese_john

vor 2 Monatendiscuss

Yes, but my point was more nuanced, I didn't mean to say that the state needs a fully owned solution.

The original article opens up with "Pix is igniting a geopolitical and commercial battle."

The point I was trying to make, specially in the last paragraph, was that: Brazil doesn't really have full control, or the capability, to operate Pix without US infrastructure. Therefore, it is not smart, to engage in a geopolitical, ideological battle against the US. If Brazil wants to tough it out and claim sovereignty, then it must be willing to walk away and build its own infra.

Case in point: the recent US-Canada tensions were enough for the Canadian government to consider cancelling the purchase of American-made F-35 fighter jets.

Is the Brazilian government willing to do the same? Is it even in its best interest to do so? In my opinion, no, hence the aggressive anti-US rethoric from Lula must stop

reese_john

vor 2 Monatendiscuss

> I'm here just to clear out the confusion regarding the infrastructural pieces. The core PIX is undeniably sovereign and state-owned

Sure, I can see the confusion, I should have made that clearer.

Let me rephrase it: the "core PIX" is mostly an implementation of ISO20022 (pain,pacs, etc) messaging on top of HTTP APIs and BCB's own ledgers, plus a centralized KV datastore (Dict).

The implementation was excellent, but there is no technical moat in the "state-owned" part of the solution

The biggest technical challenges were, by design, delegated to the private sector, heavily relying on US hyperscalers to achieve Pix's operational requirements.

reese_john

vor 2 Monatendiscuss

> The "investigations" are political posturing. PIX is not "unfair business practice"

Agree

> its a modern, cheap, state-of-the-art payments system that is better than what private businesses like MasterCard and Visa are willing to offer. I can think of plenty of ways they could offer actual value to customers so they can still be relevant.

This is a common misconception. Pix is a form of bank transfer, not a full blown payment infra like MC/Visa. They are different products, Pix doesn't make credit cards irrelevant.

Per BCB statistics: In 2020, before Pix implementation, credit cards accounted for 2% of the monthly BRL volume transacted (~ 200M BRL)

As of 2025Q4: credit cards still accounted .... for the same 2% (~ 800M BRL)

The main question is: historically, why haven't credit cards been more popular in Brazil, even before Pix?

You'll find your answer looking at structural issues (high interest, delinquency rates, bad credit offerings ...), not technical concerns

reese_john

vor 2 Monatendiscuss

> Banco Central controls the core, and that's all it needs to. This is good design. Descentralized, modern, resilient and efficient.

I agree. But was that not the case before Pix/SPI? It really didn’t change the status quo.

The STR (transfer reserve system), which SPI is still fully dependent in practice btw, is decentralized, modern and efficient.

The biggest change here was scale and adoption by private banks and end users, not sovereign infra.

reese_john

vor 2 Monatendiscuss

> US officials involving themselves in your national market because they are unhappy with the market share of their companies in it

Just to clarify, for anyone who’s been paying attention to the matter, it’s clear that the true reason for that Section 301 investigation is not due to Pix stealing market share of MC/Visa. In fact, if you check Brazil’s central bank own data, Credit Card usage has not gone down since Pix came in. What Pix really replaced was physical cash.

The fact is that Brazil’s (current) government has been publicly on the other side of Americans interests for a long time, even before Trump’s term. e.g. blatantly ignoring Iran sanctions https://www.cruz.senate.gov/newsroom/press-releases/sen-cruz...

reese_john

vor 2 Monatendiscuss

Please, he literally went on national TV on Brazil’s Independence day to claim that

“We will defend PIX from any attempt at privatization. PIX belongs to Brazil, it's public, free, and will remain so.”

Lula has been historically hostile to the US for ideological reasons.

He’s done plenty to undermine that relation, stemming from attacking the dollar dominance, ignoring Iran sanctions, to indirectly financing the Ukraine war by becoming the largest buyer of cheap Russian oil — and that’s why we have those investigations going on

reese_john

vor 2 Monatendiscuss

This is a minor technicality, if private banks are down then the SPI is basically useless. Banks can send money to each other but clients can’t see it.

> What went down were apps

Plus, this is an oversimplification.

Transaction authorization, Fraud/AML screening, account validation are not just part of an “app”, they are core functionality of private banks operations, and they are made scalable by big cloud providers.

The true scaling burden is on private banks not the BCB

reese_john

vor 2 Monatendiscuss

> But mentioning Brazil's president on this meter just adds even more politics to the discussion.

This quote is literally from the linked article — he is mentioned there

> Do you have the same opinion about the European leaders that are creating/created cloud infrastructure?

I don’t understand the question, I think it’d be great to have an European AWS equivalent just for the sake of competition, but as far as I know, we are very far from that

reese_john

vor 2 Monatendiscuss

This is not a real problem outside of niche industries

American companies are great to do business with.

Most countries, including Brazil, simply don’t have the capability to pull this on their own. Not enough tech talent nor infrastructure

reese_john

vor 2 Monatendiscuss

USD is a hard currency unlike the BRL. It is not supposed to move that fast by design. Google “Regulation E”. Brazil has no such strong provisions for protecting unauthorized transfers out of your account

reese_john

vor 2 Monatendiscuss

It is worth noting that despite all this cheap sovereignty talk from Brazil’s president, in practice Brazil would not be able to operate Pix at that scale without heavily relying on American hyperscalers companies.

Brazilian institutions are paying hundreds of millions of dollars to US cloud providers, specially AWS, to be able to process that many transactions.

Earlier this year, when sa-east-1 was down, major banks were forced to suspend Pix payments for nearly 3 hours. When this happens, some people are literally not able to buy anything because that’s their only payment method. So much for “President Luiz Inácio Lula da Silva proclaiming a nationwide campaign: “Pix is ours, my friend”.”

Don’t get me wrong, Pix has been a great success and a major achievement, but all this adversarial political talk between the US and Brazil administrations is really cringe, both countries are better doing business together.

[1]https://economia.uol.com.br/noticias/redacao/2026/02/07/falh...

reese_john

vor 2 Monatendiscuss

TED is still very much alive.

In fact, the BRL amount settled via TED is still higher than Pix, although the gap seems to be closing

reese_john

vor 3 Monatendiscuss

The treasury has an account at the FED called TGA[0] which is funded by tax payments and proceeds from new Treasuries issuance

https://en.wikipedia.org/wiki/Treasury_General_Account

> The total number of dollars that exist in circulation is reduced.

Not accurate. Dollars are a liabilities on the books of the Federal Reserve. Tax payments to the federal government only cause a liability shift from commercial banks’ reserves at the FED to the TGA, it doesn’t really change the net amount of dollars in circulation.

The most you could argue is that it momentarily reduces the net commercial banks’ liabilities (which economists call M*) until the Treasury distributes those dollars again to the broad economy

reese_john

vor 3 Monatendiscuss

> Perfectly implements" is doing a lot of work there. Enterprise software is very rarely perfect out of the box

Fair, by “perfectly implements” I meant to say that it correctly implemented the core invariant of a double entry ledger (debits = credits), not that it was 100% bug free

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